If Policymakers Expand Aggregate Demand, What Happens to Inflation and Unemployment

question 39

Multiple Choice

If policymakers expand aggregate demand, what happens to inflation and unemployment?

• A) Inflation falls but unemployment rises.
• B) Inflation and unemployment fall.
• C) Inflation and unemployment rise.
• D) Inflation rises but unemployment falls.

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Definitions:

Type B Personality

A personality type characterized by a less competitive, more relaxed, and less stress-prone behavior pattern than Type A.

Flexibility

The ability to adapt to new, different, or changing requirements and situations.

Time Urgency

A feeling of pressure to complete tasks and meet deadlines quickly, often associated with stress and a hallmark of Type A personality traits.

Belief System

A set of principles or tenets that form the foundation of a person's understanding of the world, guiding behavior and thought.